KLAC Set to Report Q3 Earnings: What's in the Cards for the Stock?

KLA Corporation KLAC is set to report its third-quarter fiscal 2025 results on April 30.

For the third quarter of fiscal 2025, KLAC expects revenues of $3 billion, plus/minus $150 million. The Zacks Consensus Estimate for revenues is pegged at $3.01 billion, indicating an increase of 27.36% from the year-ago quarter’s reported figure.

KLA expects non-GAAP earnings of $8.05 per share, plus/minus 60 cents. The consensus mark for earnings is pegged at $8.06 per share, which has moved down by a penny over the past 30 days, indicating year-over-year growth of 53.23%.

KLAC’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 6.35%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

KLA Corporation Price and EPS Surprise

 

KLA Corporation price-eps-surprise | KLA Corporation Quote

Let us see how things have shaped up for the upcoming announcement.

Key Factors to Note Ahead of KLAC’s Q3 Results

KLA's advanced packaging portfolio continues to see momentum, driven by growing demand for more powerful systems of chips and the increasing complexity of heterogeneous chip integration. This trend is enhancing the value of process control in chip packaging, fueling growth across KLAC’s broad portfolio. With advanced packaging revenues projected to exceed $800 million in 2025, up from $500 million in 2024, KLA is anticipated to have benefited from this dynamic in the fiscal third quarter as well.

KLAC’s growth trajectory in the wafer fab equipment market remains intact, supported by strong investments in leading-edge logic, high-bandwidth memory and advanced packaging. These developments, driving increased semiconductor complexity, are expected to have positively contributed to KLA’s performance in the third quarter of fiscal 2025.

Artificial intelligence (AI) has been a powerful growth catalyst for KLA as advancements in compute efficiency accelerate AI adoption and fuel greater demand for advanced semiconductors and sophisticated process control solutions. This momentum is expected to have contributed meaningfully to KLA’s strong third-quarter fiscal 2025 performance.

KLAC’s Services segment continued to deliver consistent expansion, posting $667 million in revenues in the second quarter of fiscal 2025 and marking its 50th consecutive quarter of year-over-year growth. This resilient performance is likely to have contributed positively in the quarter under review.

Nevertheless, in light of global tax reforms under Pillar 2, KLA anticipates a modest increase in its effective tax rate to approximately 14% in the second half of 2025, which is expected to have hurt the to-be-reported quarter. Furthermore, ongoing uncertainty related to the U.S. government's processing of export licenses could pose additional risks to revenue performance.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.

KLA has an Earnings ESP of +0.23% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

StoneCo STNE currently has an Earnings ESP of +13.79% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

STNE is scheduled to release its first-quarter 2025 results on May 8. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 29 cents per share, suggesting no year-over-year change. The estimate has inched up a couple of cents over the past 30 days.

Block XYZ currently has an Earnings ESP of +7.52% and a Zacks Rank #2.

XYZ is set to report first-quarter 2025 results on May 01. The Zacks Consensus Estimate for first-quarter 2025 earnings is pegged at 88 cents per share. The consensus estimate indicates year-over-year growth of 3.53%.

Compass COMP has an Earnings ESP of +16.67% and a Zacks Rank of #2 at present.

COMP is set to report first-quarter 2025 results on May 08. The Zacks Consensus Estimate for first-quarter 2025 bottom line is pegged at 6 cents per share. The consensus estimate indicates a year-over-year surge of 77.78%.

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This article originally published on Zacks Investment Research (zacks.com).

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